Every individual, businesses, and government often needs to raise capital or funds in order to expand or

grow. Financial markets plays an important role in building the capital, and proving capital access to
those who needs it. They provides funding for corporations, which in turn helps to create new jobs. It
allocate resources and provides liquidity for firms and entrepreneurs, which is essential for the proper opera
tion of capitalist economies. By raising the savings rate, mobilizing and pooling funds, producing knowledge a
bout investments, facilitating and encouraging the inflows of foreign capital, and optimizing capital allocation
, it fosters economic growth through capital accumulation and technical advancement.

An efficient flow of money from net savers to businesses, government and people in need of capital is
essential for a strong economy. Without effective transfers, the economy would be unable to run. For
example, if the government agency such as Department of Public Works and Highways cannot raise a
capital it needs, they cannot build roads or bridges that will help a smooth delivery or flow of products
from one place to another; the cost of the goods and services will become expensive because of high
shipping fee; the farmers or other business owners cannot easily sell their products in other places; the
cost of living is high; and so on. It goes without saying that productivity and employment levels would be
substantially lower, and so would our standard of living. As a result, it is imperative that our financial
markets run smoothly, swiftly, and at a low cost.

By managing risks and allocating savings, capital markets and organizations like banks play a critical role i
n the economy. This helps to promote economic growth, improve the overall
welfare , and facilitate the smooth operation of the economy.  A well
developed financial market combined with the wide range of capital goods and resources that are readil
y available better meets the needs of investors, as well as those who are looking for capital and those w
ho have extra money to invest. 
In other words, capital formation serves to fuel the economic engine. Only a market that has been thoro
ughly developed can support a healthy economy.

Financial institutions provide funding for enterprises and corporations, which in turn helps to create new
jobs and advance trade and economic progress. Increased trade results in more competition, which
means more businesses and programs that will create more jobs to every Filipinos.

This is where financial markets enters, where the capital is raised, stock prices are established, and
securities are traded. It plays a vital role in the economy since

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